Now that the United States is beginning to emerge from a mandatory long winter’s nap, it is dawning on Americans of every political stripe that a critical election is dead ahead. As always in presidential voting years, the economy is front and center, but perhaps even more so this time due to unforeseen circumstances. At issue is what the U.S. economy will look like after the Coronavirus has taken a wrecking ball to it and how that will translate at the polls.
Panic, Panic Everywhere
Panic and anxiety appear to be running wild in the streets of the nation’s capital. The Democrats are anxious over the possibility that the American economy will recover, and that will propel President Donald Trump back into office. The Republicans fear a coming Great Depression that will turn into anger at Trump, resulting in a Joe Biden win. But everyone seems to agree that the state of the American economy is central to who is likely to prevail at the polls come November.
Right-leaning economist Stephen Moore has gone on record as cautiously predicting a “swift kind of recovery for the fall.” A prominent economist for the Obama era, Jason Furman, oddly agrees with Moore and perhaps is even more strident in his forecast: “We are about to see the best economic data we’ve seen in the history of this country.”
It is more than a bit unsettling when economists from both sides of the political divide agree that the American economy is headed for good times dead ahead. Economists by nature are not the most optimistic lot, and there are naysayers out there, but thus far the optimists have grabbed the megaphone. There are plenty of theories to go around, but the preponderance of the economic gurus agree it all comes down to a question of letters.
A ‘V’ or an ‘L’
In these trying days of COVID-19, we have become familiar with the so-called curve. Economic prognosticators are running their own set of curves in trying to predict where the GDP will land before Election Day. The folks at the Brookings Institution have come up with a variety of letters to describe different economic scenarios.
First, there is the tilted “Z,” the best of all possible worlds for the re-election of Trump. The “Z” reveals a sharp upward trend to November. Then there is the “V,” the next best thing for Trump, which depicts another sharp rise in GDP. A more pessimistic view of the recovery is the “U,” a letter that shows slower curvaceous growth. The “W” is more favorable to Mr. Biden as it reveals two unstable peaks and valleys. Finally, there is the dreaded “L,” which Brookings likens to “basically what the recovery from the Great Recession looked like.” Score another one for Mr. Biden.
While the Brookings economists say the “L” best mirrors reality, one wonders if this dystopian view is a bit of an outlier as economists saddle up to their crystal balls. Even Liberty Nation’s Andrew Moran surprisingly joins the optimistic group: “In the short-term, the U.S. economy is likely going to post big numbers in the second half, which is evident in the stock market and the uptick in airline bookings.”
Despite the unusual bipartisan nature of projecting a healthy and hearty economy before the election, political analysts and campaign strategists are feverishly chewing their nails, anxious that the adage, “It’s the economy, stupid,” will burn their candidate to the ground. Liberty Nation’s Tim Donner echoed this in his recent article. “The root of Trump’s problem is a growing trove of hard data suggesting that these lockdowns have failed to achieve what was promised and, given the staggering job losses that have resulted, present a potentially grave threat to his presidency,” Donner wrote. Undergirding this comment is that the economy will still be in the tank in November.
Democratic strategists meanwhile are headed to the medicine cabinet for a good dose of Valium. Politico recently reported one former Obama administration official fretting over a revived American economy. “This is my big worry,” he said. And when asked “about the level of concern among top [Democratic] party officials, he said, ‘It’s high — high, high, high, high.’ ”
The unholy position in which Democrats find themselves is wishing and hoping for a recession or depression come November. This is not the most winsome of campaign strategies. Couple that with the educated predictions of optimistic economists from both sides of the aisle, and one wonders if the only thing the Trump folks have to fear, as one prominent Democrat once said, is fear itself.